Break-even analysis for a service company

Sprint Nextel is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 32.5 million direct subscribers (accounts) that generated revenue of $35,345 million. Costs and expenses for the year were as follows (in millions):

Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place.

a. What is Sprint Nextel's break-even number of accounts, using the data and assumptions given?
million accounts

b. How much revenue per account would be sufficient for Sprint Nextel to break even if the number of accounts remained constant?
$ million per account

Suppose you are an accountant for a large retail company. At the end of the quarter, the General Manager (GM) tells you: “Our sales are slightly below forecast and we will not make our bonus this quarter. However, I noticed that we got a lot of cash from selling gift cards. I also noticed that this cash is not included in our quarterly sales revenue. Can you include it, so that our reported sales meet the forecast and we get paid our bonus?”

a. How would you explain to the GM why the cash received for gift cards should or should not be included in your reported sales revenue?

b. What would the ethical issues be with reporting the cash received for gift cards as sales revenue?

c. How would you react to the GM’s request? Specifically, would you report the cash received for gift cards as sales revenue or not?

Break-even analysis for a service company Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 direct subscribers (accounts) that generated revenue of $36,300. Costs and expenses for the year were as follows: Cost of revenue $16,300 Selling, general, and administrative expenses 11,600 Depreciation 4,000 Assume that 60% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts). In part (a) and (b), round all interim calculations and final answers to one decimal place. a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number. accounts b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar. $ per account

Suppose that for ABC Company we have the following functions:

    Inverse Demand Function:   P = 360 - 0.8Q

    Cost Function: 120 + 200Q

    Marginal Revenue Function (MR) = 360 – 1.6Q

    Marginal Cost (MC) = 200

Determine quantity (Q) and price (P) that maximizes profit for ABC Company. Show your calculations.

an educational psychologist wishes to know the mean number of words a third grader can read per minute. She wants to make an estimate at the 99% level confidence. For a sample of 2006 third graders, the mean words per minute read was 27.2. assume a population standard deviation of 4.1. construct the confidence interval for the mean number of words a third grader can read per minute. Round your answer to one decimal place.

an educational psychologist wishes to know the mean number of words a third grader can read per minute. She wants to make an estimate at the 99% level confidence. For a sample of 2006 third graders, the mean words per minute read was 27.2. assume a population standard deviation of 4.1. construct the confidence interval for the mean number of words a third grader can read per minute. Round your answer to one decimal place.

(Silberberg, Problem 4.108) Ammonium nitrate, a common fertilizer, is used as an explosive in fireworks and by terrorists. In 2006, the RCMP set up a sting operation in Toronto where they arrested 18 members of an alleged terrorist cell who had ordered three metric tonnes (1 tonne = 1000 kg) of ammonium nitrate. If this quantity of ammonium nitrate decomposes explosively to nitrogen, oxygen, and water vapour, calculate the partial pressures (in atm) of each gas formed.